California Misadventure

When it opens early next year, Disneys California Adventure is likely to be a lot like the crowded, strip-malled state for which it is named

Eisner was dumbfounded. He turned to his new chief financial officer, Gary Wilson, and told him to handle it. Eisner wanted Wrather's 99-year lease broken, he wanted the name, and he wanted the Walt Disney Co. to be the sole owner and operator of the Disneyland Hotel.

Wilson immediately began gathering intelligence about the Wrather Corp. He learned that—after years of rejecting Disney's offers—Wrather had indicated that he would finally consider selling the Disneyland Hotel back to Walt Disney Productions. But before formal negotiations could begin, Wrather passed away in November 1984.

Wilson also learned that—since Wrather's death—the Wrather Corp. had fallen on hard times. To keep the company afloat, Wrather executives first sold off the company's oil and natural-gas holdings and then its prized television-syndication rights. Finally, the Wrather Corp. allowed a New Zealand-based firm—Industrial Equity—to acquire 28 percent of the company's stock.

Run by corporate raider Ronald Brierley, Industrial Equity quickly made its intentions known. In papers it filed with the Securities and Exchange Commission, the company announced that it intended to buy at least half of Wrather Corp.

Sensing his chance to control the Disneyland Hotel slipping away, Wilson and his team moved quickly. They asked for a meeting with Wrather Corp. management. In that meeting, Wilson voiced Disney's disapproval that ownership of the Disneyland Hotel could potentially pass to a corporate shark like Brierley.

While Disney officially could do nothing to derail Wrather's deal with Industrial Equity, Wilson did point out that the hotel's monorail maintenance contract would soon be coming up for renegotiation. Those who know Disneyland know that the monorail is a ride with unusual utility: it actually functions as a transportation link between the park and the Disneyland Hotel—the only hotel with such immediate access to the park. Wilson told Wrather management that the Mouse was considering a slight hike in the monorail maintenance fee—to, say, $10,000 per day?

The threat was none too subtle but very effective. If Wrather Corp. tried to sell off its Disneyland Hotel holdings to anyone other than the Mouse, Disney would make operating the monorail so prohibitively expensive for the new owners that there was no way they could ever profit off the hotel. Wrather had no choice but to enter into negotiations to sell the hotel to the Walt Disney Co. It took several years and $161 million, but in January 1989—34 years after Disney made his desperate deal with Wrather—the Mouse regained control of the property.

The Genius

The best part of the deal with the Wrather Corp. is that the Walt Disney Co. got back use of the Disney name. Now it was free to build a whole series of Disney hotels in Southern California, if it so chose.

Only Eisner didn't so choose. Not yet. He realized that Disneyland—as it was then configured—was strictly a one-day affair. Guests would typically drive out to Anaheim to see the park and then drive back home that same day. Consequently, there was no point in doing a Walt Disney World-style ramp-up of the number of Disney-owned hotel rooms in Anaheim.

Unless . . .

Unless there was a reason for people to stay additional days in Anaheim. Like, say, a second Disney theme park built right next door to Disneyland.

Excited by this idea, Eisner called in his Imagineers. He quickly outlined his idea for a second theme park in Anaheim and sent them back to Walt Disney Imagineering (WDI), telling them to come up with something that would amaze and astound him.

What the Imagineers initially came up with was genuinely amazing. They proposed spending $3.1 billion to turn Disneyland and the tired collection of independently owned motels and fast-food joints that surround it into a lushly gardened, brightly lit urban entertainment center. On top of the old Disneyland parking lot, WDI envisioned a West Coast version of Walt Disney World's Epcot Center, not-so-cleverly re-named Westcot Center. Nearby, an upscale retail, dining and entertainment area—Disneyland Center—would sit alongside a six-acre lake. There would also be three new hotels, adding 4,600 rooms to the resort. All this—plus a 5,000-seat outdoor amphitheater and two 10,000-car parking garages.

It was an ambitious plan. Perhaps too ambitious. But—thinking of the huge amount of money Epcot's shops and restaurants produce annually—Eisner immediately approved WDI's Westcot proposal. Anaheim and Orange County officials also heartily endorsed the Mouse's plan.

Local residents weren't so quickly won over, though. Some worried about the extra noise and traffic that an expanded Disneyland resort would create. Others voiced concerns about Westcot's icon, Spacestation Earth, a 300-foot-tall golden ball that would loom large over their neighborhoods.

Disney initially paid little heed to locals' concerns about the project—which, in the end, was probably a huge mistake.

Longtime Orange County residents Curtis Sticker and Bill Fitzgerald became so incensed by what they felt was Disney's cavalier attitude toward neighborhood concerns about Westcot that they decided to do something about it. In the spring of 1992, they formed the Anaheim Homeowners for Maintaining the Environment (Anaheim HOME). Sixteen hundred members strong, the neighborhood-rights group quickly became a force for Disney to reckon with.

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